Maybe it should be an option to set whether nosuid causes exec's of
suid programs to either fail or run without extra priviledges. The
latter would be
good if the fs had a lot of programs that really should be run setuid,
but don't absolutely have to (e.g. xterm, screen, etc. Even a copy of su
doesn't need setuid if it is only going to be used by root).

    Would one make that a kernel config option, a mount option, or what?
There seems to be a lot of good arguments for both behaviours of nosuid.